Market Downturn--Jan 22, 2010

There seems to be a war between Wall Street and Washington. The latest bombshell from Washington is Obama's plan to restrict the investment activities of banks. He does not want the banks to take high-risk, high-return trades. This limits the ability for banks to grow and prosper with the money they have for investing.

For the stock market, this means less money will be available for pushing up stock prices. Currently, a lot of people and institutions are taking profits while they can. The best way to play this scenario is to buy FAZ, an ETF that shorts bank stocks. The banks will no longer be able to grow as they expected, and their stock prices will go down along with probably the economy as well.

For other long or short stock picks, visit ClusterGains.com.

El Dorado Gold

I have owned El Dorado Gold, ticker EGO, for a couple of years now. I have made a double so far. I think El Dorado could double again in the next two to three years. One reason is that the price of gold itself may double because of demand in foreign countries and the distrust of the dollar.

Another reason is that EGO bought out Sino Gold recently. Sino was an Australian gold miner with three gold mines in China. Their main mine called Jinfeng has several million ounces of gold, and they are currently producing 180,000 ounces of gold per year.

According to Sino's website, a third mine called the Eastern Dragon is in development. It is expected to produce 90,000 ounces of gold per year at the low cost of $125 per ounce for the first five years. This makes El Dorado one of the lowest cost gold producers in the world, and they will have outstanding profit margins.

For more stock picks and analysis, go to ClusterGains.com.

Thompson Creek is heading higher

In December, five company officers either bought stock or exercised stock options for accumulation in Thompson Creek, ticker TC. It is a molybdenum resource company. I bought stock in the company again myself in 2009, and I made four times my money.

I don't know how much higher TC can go or how long it will take, but I believe a 50% gain is possible in 2010. I expect Thompson Creek may be one of the best investments this year because I don't think the general market will beat certain commodity stocks in the next five months. I believe oil is going higher, too. For more stock picks and analysis, go to ClusterGains.com.

Jayhawk Energy

I have owned Jayhawk Energy for around two years now, and I was very skeptical at first when I bought shares in the company. At the time, it looked like natural gas would become a big deal, but we found all sorts of shale gas after that, and we are now trying to work off the glut of natural gas.

Jayhawk still operates in the gas business, but the main attraction currently is that the company has 17,000 acres of prime Bakken oil property in North Dakota, just south of the Canadian border. They have bought five existing wells, and they are in the process of drilling a lot more wells. They want to drill 33 wells by 2012.

Jayhawk's (JYHK) share price has more than doubled in the last two months. I don't know how high they can go, but the Bakken oil area has surprised everyone in the last couple of years. North Dakota is putting out more oil than ever, and nobody knows when it will slow down.

I recommend buying Jayhawk, and I have a couple of Jayhawk links at ClusterGains.com so that you can follow the company news and its price chart.

Bluefly and Jinshan Gold

Bluefly (BFLY) and Jinshan Gold (JINFF) are two stocks that have doubled this year from their lows around March. Their price charts are mostly above their 50 day exponential moving averages. The charts also look like steady, gradual buying rather than a speculative buying frenzy that would turn into an exhaustion peak. I am buying both stocks tomorrow.

Bluefly is an online retailer that has defied the odds and has remained in business for at least a couple of years while I have been following them. I get regular emails about clothing sales from them. I can't say that the company will become another Amazon.com, but I think they will continue to grow and prosper. The only drawback is low trading volume, but this has been picking up lately.

As for Jinshan Gold, I have previously owned the stock, and I am buying it again tomorrow as I mentioned above. The company is based in China, and the Chinese like gold. As I find out more about the company's production, I will post additional news about them. I have been following them for years, long enough to believe in them, and I think the price of gold will also continue to rise.

I have their stock information links on ClusterGains.com along with other good stock picks.

Rising Stocks

The new year started out with a stock market rally on the morning of January 4, 2010. A lot of stocks were rising, but I believe the best stocks long-term are in the oil sector and selected tech stocks.

One oil company that is worth owning is Toreador Resources, ticker TRGL. They reportedly have possibly billions of barrels of oil in the ground on the outskirts of Paris in France. The stock price has been trending above its 50 day exponential moving average.

A tech stock that rates a strong buy is Electro-Optical Sciences, ticker MELA. This company makes medical devices, and they currently manufacture a hand-held imaging device that accurately analyzes skin lesions that could be cancerous. The stock price has more than doubled from the March 2009 low. Currently, it is rising slowly along its 50 day moving average line, slightly above and below at times.

To see other stock picks and economic information, go to www.ClusterGains.com.